If Congress makes balance billing illegal for air ambulance companies, would disputes between insurers and private equity-backed transporters finally end? Or would lawmakers be handing all the leverage to insurers?
The answer appears to depend on the air ambulance business model, the insurance company in question, and state regulators—some of whom have faced lawsuits from air ambulance companies over attempts to curb balance bills.
“It changes the business model for the bad actors,” North Dakota Insurance Commissioner Jon Godfread said of the Senate provision, which would extend the proposed ban on balance billing to air ambulances. Godfread is currently embroiled in a lawsuit with Guardian Flight, which is owned by the global private equity firm KKR Financial Holdings.
“There are certain air ambulance companies with no interest in being in-network because they feel emboldened by some of the recent court decisions to balance bill,” Godfread continued, adding: “It’s not the government’s job to keep bad actors in business.”
The air ambulance industry argues that the Senate proposal—which took them by surprise last week—doesn’t address insurers’ role in the balance billing question. “In my opinion there are bad actors that won’t have a reasonable discussion at the table,” said Seth Myers, CEO of Air Evac Lifeteam, of insurance companies. He said he’s observed “individual and unilateral and arbitrary decreases in what some payers would pay.”
For Godfread and other state insurance commissioners, the fact that the provision would remove the balance bill threat is a major win only Congress can secure. It’s up to commissioners to enforce insurance regulations like network adequacy requirements.
In an interview, Myers touched on one of the most acrimonious points for insurers and consumer advocates: the threat of the balance bill. He said much of the public fear over balance bills he sees comes from explanation of benefit notices that actually aren’t bills at all. He posed the hypothetical example where a patient sees that his insurance has paid $10,000 of a $40,000 charge and thinks he is on the hook for the remainder.
When that happens, he said his company works with the patient to negotiate a higher rate from the insurer. When that’s exhausted, the company then collects whatever the patient is able to pay.
This practice is condemned by patient advocates and insurers alike as a fear tactic that holds patients hostage for the insurance negotiation.
On the insurance side of the equation, not all carriers have gone unscathed either in the controversy of air ambulance bills, such as Anthem in Missouri, which faced scrutiny over its refusal to contract with transporters. Myers has since secured a network agreement.
And an email exchange from late April between officials of Blue Cross and Blue Shield of Illinois and Air Methods Corp.—a company facing its own share of litigation from unhappy patients over its billing practices—shows a stalemate.
Air Methods asked to enter the Blues Illinois network since the company had transported 386 of its members in 2018.
The insurer’s sole in-network air transporter is Alacura, which doesn’t run emergency flights. “Emergent transportation would be negotiated (if eligible) after the fact,” the Blues official wrote to Air Methods.
The emails did not reveal the Air Methods’ rate proposal, although the initial email from a Blues official said he understood that Air Methods was only willing to negotiate a 5% discount off charges. The Blues official ultimately said that the company’s coding system—operated by its parent company Health Care Service Corp.—couldn’t support “any type of standing air ambulance agreement.”
While air ambulances are lobbying hard against the Senate proposal, the potential impact isn’t yet clear. Mississippi could be an example of how it will play out. In that state, where the Blues are also dominant, Mississippians were seeing balance bills of $50,000 and higher for emergency transports. After prodding from Insurance Commissioner Mike Chaney, the Blues raised their rates for out-of-network air transports, he said. He also used an old law to stop balance billing. Since then the problem has largely gone away, he added.
